Previous studies have proposed two PIP2-binding sites on ERM protein but paradoxically ERM protein binding to PIP2 appears to involve a single PIP2 molecule. To elucidate the structural basis of possible mechanisms, we generated informative moesin mutations and tested three attributes: membrane localization of the expressed moesin;moesin binding to PIP2 and PIP2-induced reversal of moesin autoinhibition. The results demonstrate for the first time that the pocket containing IP3 on crystal structure (the "POCKET") mediates all three functions. Furthermore the second described PIP2-binding site (the "PATCH") is also essential for all three functions. We noted that the POCKET is a cavity which is masked in native ERM protein by a linker which we designate the "acidic flap". Analysis of three mutant moesin constructs demonstrated that the acidic flap is an autoinhibitory region. Our data support a model in which binding of PIP2 to the PATCH initiates moesin activation by inducing release of the acidic flap, which facilitates subsequent activation by PIP2 binding to the POCKET. We have also investigated the molecular basis of autoinhibition by the C-terminal tail. The results of mutational analysis demonstrate that the "leucine zipper" is a contributor to the autoinhibition.